Concerned with finding out whether consumers will buy a product or service, and is done by analyzing consumer reactions
Reasons for market research
Reduce the risks associated with new product launches
Predict future demand changes
Explain patterns in sales of existing products and market trends
Assess the most favored designs, flavors, styles, promotions for a product
Market research process:
Identify consumer needs and tastes
Primary and secondary research into consumer needs and competitors
Product idea and packaging designs
Testing product and packaging with consumer groups
Brand positioning and advertising testing
Pre-testing of the product image and advertisement
Product launch and after launch period
Monitoring of sales and consumer response
Types of market research
Primary research
Gathering data or feedback first-hand, through
Questionnaires (short and focused, allows open-ended questions)
Observation (foot traffic, queuing time)
Sampling (new product or campaigns)
Focus groups (asking groups of people)
Interviews
Advantages
Up to date
More relevant/direct
Confidential and unique
Objective
Disadvantages
Time consuming
Costly
Questionable validity
Secondary research
Collecting second-hand information from other sources like
Market analyses (shows relevant market data)
Government publications
Academic journals
Media articles
Secondary research should be undertaken first because it is cheap, fast, comes with plenty of sources and offers a wide range of information
Advantages
Cheaper and faster
Range of sources
Insight to trends
Disadvantages
May become obsolete or out of date quickly
May be in an inappropriate format
Partial information
Widely available to competitors
Qualitative vs. quantitative research
Qualitative research
Used to get feedback to understand motivation , behavior, perception through focus groups, expert panels, in-depth interviews of credible individuals
Qualitative explores attitudes and opinions and can be very deeply relevant even if only few are interviewed
Can only give an indication and does not have statistical relevance.
Relatively inexpensive but harder to analyze, more time consuming, and results are subject to bias or skill of interviewer
Quantitative research
Used to get statistical data from total (for figures) or representative sample (for opinion, decisions), using interviews that have closed questions or use ranking or sliding scales
Quantitative can only ask factual answers but may not reveal reasons why
A larger representative sample is needed and must be designed well so it ends up more costly to undertake
Sampling
Consumer surveys ask consumers for their opinions and preferences
It can obtain both qualitative and quantitative information
How many…..
What do you look for….
4 points for consideration when making surveys
What to ask?
Questions are unbiased and unambiguous
How to ask?
Should the survey be self-completed or filled in by an interviewer?
How accurate is it?
Accurate and valid
Who to ask?
It is impossible to ask everybody even if it is just potential members of a target market
A sample reflects the characteristics of the survey population
Sample should be significant and valid to avoid sample error
Sampling methods
Random sampling
Random selection, based on the principle that everyone is given equal chance
Stratified sampling
Segmentation with number of respondents per group based on proportion to the population
Majority of the population will compose of majority of the survey
Cluster sampling
Used for localized surveys (e.g. towns, region, etc.)
Sample based on a geographic location/ concentration of the target
Quota sampling
A certain number or quota is set, made up of samples from each segment or random
Snowball sampling
Respondents are networked from a respondent’s referral
Convenience sampling
Respondents are chosen based on accessibility and proximity
